Central Pivot Point Cross & Retrace Strategy // AlgoFyre

17 окт.

The Central Pivot Point Cross & Retrace Strategy uses pivot points for trend identification and trade entry. It combines accumulation/distribution indicators with pivot point levels to generate signals. The strategy incorporates dynamic position sizing based on a fixed risk amount and allows for both long and short positions with customizable stop-loss levels.


TABLE OF CONTENTS

🔶 ORIGINALITY

🔸Pivot Point-Based Trading
🔸Accumulation/Distribution
🔸Dynamic Position Sizing
🔸Customizable Risk Management

🔶 FUNCTIONALITY

🔸Indicators

🞘 Pivot Points
🞘 Accumulation/Distribution

🔸Conditions

🞘 Long Entry
🞘 Short Entry
🞘 Take Profit
🞘 Stop Loss

🔶 INSTRUCTIONS

🔸Adding the Strategy to the Chart
🔸Configuring the Strategy
🔸Backtesting and Practice
🔸Market Awareness
🔸Visual Customization

🔶 CONCLUSION


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🔶 ORIGINALITY

The Central Pivot Point Cross & Retrace Strategy uniquely combines pivot point analysis with accumulation/distribution indicators to identify optimal entry and exit points. It employs dynamic position sizing based on a fixed risk amount, ensuring consistent risk management across trades. This approach allows traders to adapt to varying market conditions by adjusting position sizes according to predefined risk parameters, enhancing both flexibility and control in trading decisions. The strategy's integration of customizable stop-loss levels further refines its risk management capabilities.

🔸Pivot Point-Based Trading

This strategy utilizes daily pivot points to identify key support and resistance levels, providing a framework for trend identification and trade entry. The central pivot point serves as the intraday point of balance between buyers and sellers, with the largest amount of trading volume assumed to take place in this area.

🔸Accumulation/Distribution

The strategy incorporates the Accumulation/Distribution (A/D) line, an underrated volume-based indicator, to establish the main trend. The A/D line is used in conjunction with a trend based indicator like the 200-period Exponential Moving Average (EMA) to confirm trend direction and strength.

🔸Dynamic Position Sizing

Position sizes are calculated dynamically based on a fixed risk amount, allowing traders to maintain consistent risk exposure across trades.

🔸Customizable Risk Management

Traders can set flexible risk-reward ratios and adjust stop-loss and take-profit levels, tailoring the strategy to their risk tolerance and market conditions. The strategy recommends taking partial profits at S1 or R1 levels and moving the stop-loss to break-even for remaining positions.

🔶 FUNCTIONALITY

The Central Pivot Point Cross & Retrace Strategy leverages pivot points and accumulation/distribution indicators to identify optimal trading opportunities. This strategy is designed to capitalize on price movements around key pivot levels by dynamically adjusting position sizes based on predefined risk parameters. It allows traders to manage risk effectively while taking advantage of both long and short positions.

🔸Indicators

🞘 Pivot Points: Calculates daily pivot points (PP, R1, R2, S1, S2) to identify key support and resistance levels. The central pivot point is crucial for determining market bias and entry points.

🞘 Accumulation/Distribution: Uses the A/D line and with a trend based indicator like the 200 EMA to determine market direction and trend strength. This combination helps eliminate noise and provides more reliable trend signals. We recommend using the Adaptive MAs (Hurst, CVaR, Fractal) // AlgoFyre, but any moving average could be used.

🔸Conditions

🞘 Long Entry: Initiates a long position when the price crosses above the central pivot point (PP), retraces back to it and the A/D line is above its 200 EMA, indicating an uptrend. A limit entry order is set at the PP for entering the long trade.

🞘 Short Entry: Initiates a short position when the price crosses below the central pivot point (PP), retraces back to it and the A/D line is below its 200 EMA, indicating a downtrend. A limit entry order is set at the PP for entering the short trade.

🞘 Take Profit: 50% of the position is closed as profit when R1 for Longs and S1 for Shorts is reached. The position is fully closed when R2 for Longs and S2 for Shorts is reached.

🞘 Stop Loss:Stop loss is set via strategy settings. When the first 50% take profit for both long and shorts is taken, stop loss for both will be moved to break-even/entry.

🔶 INSTRUCTIONS

The Central Pivot Point Cross & Retrace Strategy can be set up by adding it to your TradingView chart and configuring parameters such as the accumulation/distribution source, stop-loss percentage, and risk management settings. This strategy is designed to capitalize on price movements around key pivot levels by dynamically adjusting position sizes based on predefined risk parameters. Enhance the accuracy of signals by combining this strategy with additional indicators like trend-following or momentum-based tools. Adjust settings to better manage risk and optimize entry and exit points.

🔸Adding the Strategy to the Chart

1. Go to your TradingView chart.
   
2. Click on the "Pine Editor" button at the bottom of the chart.
   
3. Copy and paste the strategy code into the Pine Editor.
   
4. Click "Add to Chart" to apply the strategy.
   
5. Add the technical indicator "Accumulation/Distribution" to the chart.
   
6. Add the trend indicator "Adaptive MAs (Hurst, CVaR, Fractal) // AlgoFyre" or any other MA to the chart and move it to the "Accumulation/Distribution" pane.
   
7. Set the source of your trend indicator to "Accumulation/Distribution".
   

🔸Configuring the Strategy

1. Open the strategy settings by clicking on the gear icon next to its name on the chart.
   
2. Accumulation/Distribution Source: Select the source for the accumulation/distribution indicator.
   
3. Accumulation/Distribution EMA Source: Select the source for the trend indicator.
   
4. Stop Loss Percentage: Set the stop loss distance from the pivot point as a percentage.
   
5. Risk Amount: Define the fixed risk amount for position sizing.
   
6. Base Order Size: Set the base order size for position calculations.
   
7. Number of Positions: Specify the maximum number of positions allowed.
   
8. Time Frame: Adjust the time frame based on the currency pair or asset being traded (e.g., 15-minute for EUR/USD, 30-minute for GBP/USD).
   

🔸Backtesting and Practice

1. Backtest the strategy on historical data to understand how it performs in various market environments.
   
2. Practice using the strategy on a demo account before implementing it in live trading.
   
3. Test different time frames and asset pairs to find the most suitable combinations.
   

🔸Market Awareness

1. Keep an eye on market news and events that might cause extreme price movements. The strategy reacts to price data and might not account for news-driven events that can cause large deviations.
   
2. Remember that this strategy is not recommended for stocks due to the A/D line's inability to account for gaps in its calculation.
   

🔸Visual Customization

1. Visualization Settings: Customize the display of entry price, take profit, and stop loss levels.
   
2. Color Settings: Switch to the AlgoFyre theme or set custom colors for bullish, bearish, and neutral states.
   
3. Table Settings: Enable or disable the information table and adjust its position.
   

🔶 CONCLUSION

The Central Pivot Point Cross & Retrace Strategy provides a robust framework for capitalizing on price movements around key pivot levels by combining pivot point analysis with accumulation/distribution indicators. This strategy leverages pivot point crossovers to identify entry points and utilizes the A/D line crossover with its 200 EMA for trend confirmation, ensuring trades align with prevailing market conditions. By incorporating dynamic position sizing based on a fixed risk amount, traders can effectively manage risk and adapt to varying market conditions. The strategy's focus on trading around the central pivot point and its customizable stop-loss and take-profit levels further enhance its risk management capabilities, making it a versatile tool for both trending and ranging markets. With its strategic blend of technical indicators and risk management, the Central Pivot Point Cross & Retrace Strategy offers traders a comprehensive approach to optimizing trade execution and maximizing potential returns across various currency pairs and commodities.